Bridging the Quality vs. Quantity Divide in Healthcare

By David Nace, MD

Experts point to rising healthcare costs as a symptom of overuse, underuse and misuse of care delivery services. With the 2010 Patient Protection and Affordable Care Act (PPACA), the Centers for Medicare & Medicaid Services (CMS) set a goal of changing the model for payment for care from the fee-for-service model, which rewards providers for quantity of care, to a model that makes the care delivery organizationaccountable for delivering quality and value. The new model focuses on achieving the “Triple Aim” of better health, better care, and lower costs for the overall population.

Key to supporting the change will be healthcare IT. The accountable care organization (ACO) must have an infrastructure that supports information exchange among members and settings of care to achieve care integration and coordinated care delivery. Success also depends on an infrastructure that aggregates and normalizes patient-centric data, provides analytics for population health management, and offers clinical and financial decision support at the point of care.

Skin in the Game

In an ACO, everyone has “skin in the game” — from the practice, to the hospital, to the extended care facility, to the payer. Medical decisions are based on medical evidence, and reimbursement is based on patient outcomes and the cost-effectiveness of treatments. Both the ACO and patient’s primary care physician are responsible for the patient’s outcomes along the continuum of care. In an ACO, members must accept and understand their own and each other member’s responsibilities for the patient’s care. Also important is clarity on when, how, and to what degree responsibility is transferred to other ACO participants during the course of care.

Having a primary care “home” within the organization that is “connected” to the rest of the ACO for the exchange of information is vital for the management of the patient’s care. This includes settings such as hospitals and other acute settings of care, outpatient specialists, extended care facilities, laboratories and pharmacies, as well as the patient and their families/caregivers.

A Range of Risk/Reward Models

As long as the ACO achieves the Triple Aim, models may vary. PPACA supports piloting a broad range of payment models that have varying degrees of clinical and financial risk, such as:

  • Pay for performance (quality, efficiency, and consumer engagement)
  • Shared savings for reductions in utilization when quality thresholds are met
  • Additional payment (per member, per month) for additional care activities that are not on the fee schedule
  • Bundled payments for clinically defined episodes of care
  • Partial capitation, including a predefined monthly payment to cover specific services for a defined group of patients

Global budgets or payments that would provide an agreed-upon fixed budget or payment for the medical needs of a population of patients
Coupled with risk assumption is accountability for quality, outcomes, evidence-based processes, consumer access and experience. The greater the risk, the greater the potential for reward.

Analytics — The Enabler

Because the quality and efficiency of care will affect the amount and distribution of payments, healthcare analytics will be used to provide transparency on care performance and cost for individual physicians and business entities in the ACO organization. Analytics also provides the engine for patient care improvement and population health management.

Health IT will connect ACO members, providing them and the patient with…(read complete post here).

Dr. David Nace is vice president and Medical Director with McKesson Corporation, where he is responsible for clinical development of McKesson’s RelayHealth and Health Solutions products and services. Since the early 1990’s, he has played a leadership role in organized healthcare for both the hospital / provider and payer markets. He has served as an advisor for prestigious organizations such as the Robert Wood Johnson Foundation, the United Nations Business Council, and the World Health Organization, addressing issues such as health promotion and wellness from a benefit design and healthcare financing perspective.


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